So there is a push in gold, there’s a strength in oil, and that is in a way a flight from currencies.FT: Is there going to be a tipping point, a moment at which the dollar is fatally weakened? Or does it just sort of carry on?GS: As long as the renminbi is tied to the dollar, I don’t see how the decline in the dollar can go toofar. Now, of course, to some extent it’s very helpful because with the US consumers saving more andspending less, exports can be way for the US economy to be balanced. So, an orderly decline of thedollar is actually desirable.FT: Does it, at some point, need also to decline against the renminbi? Does there need to be some sortof a new global currency deal?GS: No. I believe that basically the system is broken and needs to be reconstituted. We cannot afford tohave the kind of chronic and mounting imbalances in international finance. So, you need a newcurrency system and actually the special drawing rights do give you the makings of a system and Ithink it’s ill-considered on the part of the United States to resist the wider use of special drawing rights.They could be very, very useful now when you have a global shortfall of demand. You could actuallyinternationally create currency through special drawing rights and we’ve done it. We issued $250bnand that’s a very, very useful step, except the rich countries don’t actually need the additional reserves,so all they can do is put it in the shop window and say, we have got that much extra. But they can’tactually use it. Now I think it could be used to provide global public goods. The rich countries couldput their allocations in escrow. The problem is that there is a cost to using SDRs. It’s a very small costat the moment; it’s less than 0.5 per cent, but still is a cost, so somebody has to pay it and I think wehave actually the means to do it because the IMF has very large gold reserves – kept in the books at avery low price – and it has been decided to use those gold reserves to the benefit of the least developedcountries. So, the IMF could actually pick up the cost of paying for the special drawing rights ...FT: Using its gold reserves?GS: And, in fact, it’s being done. It hasn’t had any publicity, but I understand that in Istanbul a dealwas signed where I think the UK and France actually transferred $2bn of their SDRs, or 2bn SDRworth to the least developed countries, and the IMF picks up the cost. So, it’s a road that’s alreadybeing used and it could be used on a larger scale.FT: What sort of a financial deal should Obama be seeking to strike when he travels to China nextmonth?GS: I think this would be time because you really need to bring China into the creation of a new worldorder, a financial world order. They are kind of reluctant members of the IMF. They play along, butthey don’t make much of a contribution because it’s not their institution. Their share is notcommensurate ... their voting rights are not commensurate to their weight, so I think you need a newworld order that China has to be part of the process of creating it and they have to buy in. They have toown it the same way as, let’s say, the United States owns the Washington consensus, the current order,and I think this would be a more stable one where you would have co-ordinated policies. I think themakings of it are already there because the G20, in agreeing to peer reviews, effectively is moving inthat direction.FT: Do you think it’s possible to persuade China to allow the renminbi to become stronger?GS: I think that they would be ... they’ve been advocating for it, so I would take them at their word anduse this as a special drawing rights more often and make the renminbi, even though it’s not convertible,part of the SDR. In other words, it should be one of the currencies used in the special drawing rightarrangement, and that will bring them in.FT: And that’s possible even with the renminbi not being convertible?